The Langer Heinrich Mine was discovered in 1973 and has been the cornerstone of PDN production

The Langer Heinrich Mine in Namibia, discovered in 1973, has been the cornerstone of PDN's production.

Paladin Energy (PDN:TSX), which was halted yesterday, resumed trading today after announcing it was cancelling the sale of a minority interest in the Langer Heinrich Mine in Namibia and is instead going to issue 15% of its outstanding share capital at a 30% discount to the market.  Needless to say, the market isn’t happy, with shares down 18.5% in early trading. Management commented, “The current weakness in the spot uranium price ($34.50 (U.S.) per pound) should not overly influence the valuation of a flagship asset such as Langer Heinrich."

Steels Corp., who are covering the company, have decided to exit their Paladin position today citing elevated risks. Founder James Steels commented, "The company remains very levered due to a significant amount of debt. I view this news as very negative as the cash raise is significantly less than the projected proceeds from LHM (which were intended to reduce debt levels) and uranium prices continue to remain depressed. As a higher cost producer, Paladin could run into liquidity issues if prices remain low. The company projects that current cash levels will allow the company to continue operating as a going concern until Sept 2014. If uranium prices drop further, that date will obviously change."

Here's the 12 month PDN chart:

TSX:PDN 12 months (Stockwatch)

TSX:PDN 12 months (Stockwatch)

Read: Paladin Energy Provides Operational and Strategic Update